More multi-million pound carbon credit companies are shut down following Insolvency Service investigations

A web of 13 companies involved in a scheme to sell carbon credits to the public for investment that raised over £19 million has been wound up in the High Court on grounds of public interest, following an investigation by the Insolvency Service.

At the web’s centre was Eco-Synergies Ltd, a wholesaler of Voluntary Emission Reduction (“VER”) carbon credits, which it supplied to other, often related companies to market to the public for investment.

Such investments were sold to the public using false claims contained in slick brochures, among other methods.

Welcoming the court’s winding up decisions Chris Mayhew, Company Investigations Supervisor at the Insolvency Service, said:

Eco-Synergies Ltd was at the centre of and controlled this web of companies in this patently bad scheme to sell carbon credits to the public for investment. The use of associates was central to its “pioneering” business model. The credits were sold at such inflated prices that an unnatural increase in value would be required before investors could break even let alone see a return on their investment.

Essentially investors including vulnerable individuals and often repeat victims who were urged to buy more and more credits have lost their money.

I would urge anyone cold-called and offered hot air by callous individuals to simply hang up the call.

Nobody should be left in any doubt that the Insolvency Service will act whenever we discover there are serious failings and such businesses should therefore note that working together with other regulators, we will be coming after you.

The investigation uncovered that carbon credits sourced by Eco-Synergies Ltd for an average of 65p per credit were then sold to investors by the web of ostensibly unrelated companies at an overall mark-up of up to 869%.

The investigation revealed that investors had paid some £19 million for carbon credits shown to have cost Eco-Synergies Ltd some £2.3 million.

Eco-Synergies Ltd described itself as a carbon market pioneer and claimed to be “the voluntary carbon specialists”. This company provided bespoke assistance to the outer web companies thereby enabling those companies to sell carbon credits to the public for investment.

Eco-Synergies Ltd benefitted from the sales made to the public by such companies as it supplied the credits to them at a mark up stressing to them that they themselves could expect returns in excess of 60%, telling them “You simply complete a trade and we will do the rest”.

A presentation brochure to the web companies recovered by the investigation describes Eco-Synergies Ltd as, amongst other things:

the largest wholesale supplier of carbon credits in the market with 25+ active trading agents,

that it settled between 1-2 million credits a month,

had a monthly turnover of £5m+

had spent £200,000 on legal fees to ensure its system and contracts were “watertight” and

would train your staff on the market and how to sell this product successfully.

The brochure’s “Case Study” focused on one associated company MH Carbon Limited (see Note 9) which Eco-Synergies Ltd exclusively supplied and worked with directly to sell out credits for them. The company described MH Carbon Limited as, amongst other things:

one of the market leaders and the largest in terms of revenue floor of this type in London,

that it settled between 400,000-500,000 credits a month and

had average monthly sales of £2 million.

Mr Gavin Manerowski, an initial shareholder of Eco-Synergies Ltd, was a director of MH Carbon Limited (see notes 1 and 9 below) which, together with the other marketing companies, made false and misleading statements to the public to persuade them to invest in carbon credits.

Mr Manerowski, together with Mr Richard Beese, Mr David White and Mr Jonathan Cocks also established a non trading company Eco-Synergies Nominees Ltd to hold the credits purchased by the public on trust for investors.

Eco-Synergies Nominees Ltd did not oppose the winding up action and afterwards the professional director and secretary of the company served notice of their intention to resign their appointments.

Custodian and trust services were provided to the scheme by an FCA authorised trust company that shortly before the winding up hearing wrote to investors informing them of the winding up petition issued against Eco-Synergies Nominees Ltd that was not being opposed.

Notes to Editors

Eco-Synergies Ltd was incorporated on 1 March 2011. The registered office of the company from incorporation to 12 November 2012 was Network House, Takley Road, Bambers Green, CM22 6PF and thereafter 3rd Floor, Cutlers Court, 115 Hounsdtich, London, EC3A 7BR until 17 January 2013 when the company resolved to place itself into voluntary liquidation (see below). The recorded directors of the company have been Mr Simon Peter Barr from incorporation to 25 October 2012 and thereafter Mr Nicolas Whitfield Towers. No company secretary is shown to have been appointed. The share capital is shown to be £100 divided into 70 “A” ordinary shares of £1 each and 30 “B” ordinary shares of £1 each all shown to be held by Capital Nominees Limited. The former recorded shareholders were Mr Richard Beese, Mr David White and Mr Gavin Manerowski.

The company traded from 3rd Floor, Cutlers Court, 115 Hounsditch, London, EC3A 7BR and operated two websites: www.ecosynergiesgroup.com and www.ecosynergiesgroup.net

On 6 February 2013 the company resolved to place itself into voluntary liquidation with reported assets of £9,585 comprising office equipment £4,712 and £9,000 cash held on appointment of the liquidator and with reported liabilities of £102,000 comprising £100,000 corporation tax and £2,000 due to Mr Towers. According to the statement of affairs Mr Towers was the sole shareholder. Mr Jeffrey Mark Brenner of Trafalgar House, Grenville Place, Mill Hill, London, NW7 3SA was appointed liquidator. On 29 November 2013 Mr Brenner reported to creditors and at a meeting of creditors was released from office as liquidator and shortly thereafter the company was dissolved on 5 March 2014. On 1 May 2014 the Court ordered the company to be restored to the register and to be wound up compulsorily in the public interest.

Eco-Synergies Nominees Ltd was incorporated on 23 March 2011. The registered office from incorporation to 8 February 2012 was Hendford Manor, Yeovil, BA20 1UN and thereafter to present date, 5 Priory Court, Tuscam Way, Camberley, Surrey, GU15 3YX. The recorded directors of the company have been Mr Simon Peter Barr from incorporation to 1 October 2011 and Mrs Anna Kathryn Rickard, Citadel Nominees Limited and Citadel Secretarial Services Limited each from 01 February 2012 to present date. The secretary from 01 February 2012 to present date has been Citadel Secretarial Services Limited. The share capital is shown to be £100 divided into 70 “A” ordinary shares of £1 each and 30 “B” ordinary shares of £1 each. The “A” ordinary shares are shown to be held by Citadel Nominees Limited and the “B” ordinary shares are shown to be held by Citadel Secretarial Services Limited. The former recorded shareholders were Mr Beese, Mr White, Mr Manerowski and Mr Jonathan Cocks.

Alternative Capital Limited was incorporated on 9 September 2011. The registered office of the company from incorporation to 27 March 2012 was 37th Floor, 1 Canada Square, London, E14 5AA and thereafter 107 Cheapside, London, EC2V 6DN until 18 April 2013 when the company resolved to place itself into voluntary liquidation (see below). The recorded directors of the company have been Mr George Vito Michael Andreetti from incorporation to 22 August 2012 and Mr Lewis Joseph Tweed from 3 April 2012 to present date. No secretary is shown to have been appointed. The company’s share capital is shown to be £10 divided into 10 ordinary shares of £1 each all shown to be held by Mr Tweed.

The company traded from 140 Providence Square, London, SE1 2ED and operated a website: www.alternative-capital.co.uk

On 9 April 2013 the company resolved to place itself into voluntary liquidation with no reported assets and with reported liabilities of £64,767 comprising £53,303 due to HMRC in respect of unpaid PAYE and NIC and £11,464 due to trade and expense creditors. Mr Stephen Franklin and Mr Panos Eliades of Olympia House, Armitage Road, London, NW11 8RQ were appointed joint liquidator.

Mr Nicholas Sharp appears as a contact for Alternative Capital Limited on documentation recovered by the investigation from Eco-Synergies Ltd. Mr Sharp was the floor manager for Beta Commodities Ltd (see note 4 below) and a sales manager for World Commodity Trading Limited (see note 12 below). He was the contact for “H-Group” a trading style of Hildon Green Energy Markets Limited which sold carbon credits using objectionable and improper sales techniques and was ordered into liquidation in the public interest on 10 May 2013.

Beta Commodities Limited (which traded as “Alpha Commodities”) was incorporated on 05 October 2011. The registered office from incorporation to 25 September 2012 was 52 Royston Park Road, Hatch End, Pinner, Middlesex, HA5 4AF and thereafter 25 Canada Square, Canary Wharf, London, E14 5LQ to present date. The recorded directors of the company have been Mr Yomtov Eliezer Jacobs for one day only on incorporation and Mr James Michael Cable thereafter to present date. No secretary is shown to have been appointed. The company’s share capital is shown to be £100 divided into 100 ordinary shares of £1 each all shown to be held by Mr Cable.

Capital Acquisitions Ltd was incorporated on 15 March 2010 in the name Capital Marketing Solutions Limited. The name was changed to its present style on 10 June 2010. The registered office of the company from incorporation to 20 February 2013 was 1st Floor, 2 Woodberry Grove, North Finchley, London, N12 ODR and thereafter 44-50 High Street, Rayleigh, Essex until 25 June 2013 when the company resolved to place itself into voluntary liquidation (see below). The sole recorded director throughout has been Mr William Edward Strutt. The company’s share capital is shown to be £1 comprising 1 ordinary share shown to be held by Mr Strutt.

The company traded from 1 Liverpool Street, London EC2M 7QD and operated a website: www.capital-acquisitions.com

On 17 June 2013 the company resolved to place itself into voluntary liquidation with no reported assets and with reported liabilities of £22,373 comprising £10,000 shown to be due to Mr Strutt, £1,917 due to HMRC in respect of corporation tax, £150 due to Companies House and £10,305 due to trade and expense creditors. Mr Jeffrey Mark Brenner of Trafalgar House, Grenville Place, Mill Hill, London, NW7 3SA was appointed liquidator.

City Asset Partnership Ltd was incorporated on 15 November 2011. The registered office of the company from incorporation to 28 February 2012 was The Bristol Office, 2 Southfield Road, Westbury on Trym, Bristol, BS9 3BH and thereafter Allen House, 1 Westmead Road,

Sutton, Surrey, SM1 4LA until 21 June 2013 when the company resolved to place itself into voluntary liquidation (see below). The sole recorded director throughout has been Mr William Edward Strutt. The company’s share capital is shown to be £10 comprising 10 ordinary shares all shown to be held by Mr Strutt.

The company traded from City Point, 1 Ropemaker Street, London, EC3A 7BR and operated a website: www.cityap.co.uk

On 17 June 2013 the company resolved to place itself into voluntary liquidation with no reported assets (other than computer equipment of uncertain value) and with reported liabilities of £5,611 comprising £5,000 shown to be due to Mr Strutt, £111 due to HMRC in respect of unpaid VAT and £500 due to a trade creditor. Mr Jeffrey Mark Brenner of Trafalgar House, Grenville Place, Mill Hill, London, NW7 3SA was appointed liquidator.

Cleartrade Limited was incorporated on 19 October 2011. The registered office throughout has been One Cornhill, London, EC3V 3ND. The recorded directors are shown to have been Mr Graham Stephen Philip Hawrysh from incorporation to 30 October 2012; Mr Carl Stuart Thornton from 27 October 2011 to present date and Mr Marcel McKeigue also from 27 October 2012 to present date. No secretary is shown to have been appointed. According to the incorporation documents the company’s share capital is £1 comprising 1 ordinary share shown to be held by Mr McKeigue.

The company traded from One Cornhill, London, EC3V 3ND and operated a website: www.cleartradegroup.com

C T Carbon Limited was incorporated on 28 July 2011. The registered office from incorporation to 12 November 2013 after the company had resolved to place itself into liquidation (see below) was 34 Bridge Road, Wickford, Essex, SS11 8PE. The sole recorded director throughout is shown to have been Mr Christopher James Thompson. No secretary is shown to have been appointed. According to the incorporation documents the company’s share capital is £1 comprising 1 ordinary share shown to be held by Mr Thompson.

The company traded from 27 Throgmorton Street, EC2N 2AQ and operated a website: www.ctcarbon.co.uk

On 04 December 2012 the company’s affairs (with others) were subject to City of London Police action – see news release “Detectives dismantle suspected carbon credit fraud operation in the City” issued on 07 December 2012:

On 01 November 2013 the company resolved to place itself into voluntary liquidation with no reported assets and reported liabilities of £28,000 of which £20,000 is shown to be due to Mr Thompson and £8,000 is shown to be due to HMRC in respect of unpaid PAYE. The joint liquidator is Mr Lloyd Biscoe and Mr Wayne Macpherson of The Old Exchange, 234 Southchurch Road, Southend-on-Sea, SS1 2EG.

MH Carbon Limited was incorporated on 27 September 2010. The registered offices are shown to have been

8 St Thomas Street, London Bridge, London, SE1 9RS from 15 March 2013 for one day only;

Hendford Manor, Hendford, Yeovil, Somerset, BA20 1UN from 15 March 2013 to 12 June 2013 after the company had resolved to place itself into voluntary liquidation (see below).

The recorded directors of the company are shown to have been Mr Gavin Manerowski from incorporation to 27 September 2010; Mr Jonathan Cocks from incorporation to 01 July 2011 and Mr Jeffrey Razaq from 24 October 2012 to present date. No secretary is shown to have been appointed. The company’s share capital is shown to be £102 divided into 100 “A” ordinary shares of £1 each and 2 “B” ordinary shares of £1 each all of which are shown to be held by PCS Nominee Limited. The former shareholders were Mr Manerowski and BW Carbon Limited.

On 31 May 2013 the company resolved to place itself into voluntary liquidation with no reported assets and reported liabilities of £36,566 comprising £16,000 shown to be due to Mr Razaq and £20,586 shown to be due trade and expense creditors. The liquidator appointed was Mr Jamie Playford of 2-4 Queen Street, Norwich, NR2 4SQ.

New Frontier Advisory Ltd was incorporated on 16 August 2010. The registered office of the company from incorporation to 08 December 2011 was 81-83 High Street, Rayleigh, Essex, SS6 7EJ and thereafter 44-50 High Street, Rayleigh, Essex SS9 7ES to present date. The sole recorded director of the company throughout is shown to have been Mr Charles Denbigh. No secretary is shown to have been appointed. The company’s share capital is shown to be £1 comprising 1 ordinary share shown to be held by Mr Denbigh.

The company traded from 1 Fetter lane, London, EC4A 1BR and operated a website: www.newfrontieradvisory.com

Wealth Capital Ltd was incorporated on 30 May 2012. The registered offices of the company are shown to have been:

The sole recorded director of the company throughout is shown to have been Mr Darren Bartlett. No secretary is shown to have been appointed. According to the incorporation documents the company’s share capital is shown to be £1 comprising 1 ordinary share shown to be held by Mr Bartlett.

The company traded from Tower Bridge, 46-48 East Smithfield, London, E1W 1AW and operated a website: www.wealthcapital.co.uk

World Commodity Trading Limited was incorporated on 14 May 2012. The registered office of the company from incorporation to 02 April 2014 after the company had resolved to place itself into voluntary liquidation (see below) was 2 More London Place, London, SE1 2RE. The recorded directors of the company are shown to have been Mr Mark Griffiths from incorporation to present date and Miss Rebecca Pate from 27 March 2014 to 29 March 2014. No secretary is shown to have been appointed. The company’s share capital is shown to be £100 comprising 100 ordinary shares of £1 each which are all shown to be held by Mr Griffiths.

The company traded from 3 More London Place, London, SE1 2RE and operated a website: www.worldcommoditytrading.com

On 28 March 2014 the company resolved to place itself into voluntary liquidation with no reported assets (other than a rent deposit shown to be £30,000 but having an uncertain value) and with reported liabilities of £49,502 shown to comprise £11,500 due to HMRC in respect of unpaid PAYE and £35,000 in respect of unpaid VAT and £3,002 shown to be due to trade creditors. The liquidator appointed was Mr John Paylor of 6 Snow Hill, London, EC1A 2AY.

Worldwide Commodity Partners Limited was incorporated on 25 May 2011 in the name World Carbon Limited. The name of the company was changed to its present style on 17 May 2012. The registered offices of the company are shown to have been Stewart House, 86A Broadway, Leigh on Sea, Essex SS9 1AE from incorporation to 07 July 2011 and thereafter 33 Throgmorton Street, London, EC2N 2BR to present date. The recorded directors of the company are shown to have been Mr Keith Robert Lane from incorporation to 09 June 2011 and Mr Lee Thompson from 09 June 2011 to present date. No secretary is shown to have been appointed. The company’s share capital is shown to be £1 comprising 1 ordinary share shown to be held by Mr Thompson.

The company traded from 33 Throgmorton Street, London, EC2N 2BR and operated a website: www.worldwidecommodities.co.uk

The grounds for winding up each company were that they traded with a lack of commercial probity and as regards the associated sales companies made false and misleading statements in order to sell VER carbon credits to the public for investment at exaggerated prices.

The petitions to wind up the companies were presented in the High Court on 10 December 2013 under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended.

At the first hearing of the petitions on 01 May 2014 Cleartrade Limited was represented by Counsel and solicitors Locke Lord (UK) LLP and sought an adjournment of the petition for a period of 12 weeks in order to provide instructions to its solicitors and to file evidence in answer. The application was refused. The petition against a 14th company, which was represented by Counsel and solicitors Litigaid Law was adjourned until 04 June 2014. The company undertook through its sole recorded director not to trade. The company’s former sole recorded director was also present at the hearing.

In ordering the 13 companies into liquidation on grounds of public interest on 01 May 2014 Mr Registrar Jones gave a detailed and damning judgement during which he said:

There is no evidence in opposition subject to evidence filed, and best described at the last minute, by [a 14th company]. The Secretary of State is represented by Counsel Mr Mark Mullen. Only two of the companies are represented. Counsel Miss Vivienne Tanchel appears on behalf of [the 14th company] and Counsel Mr Niall McCulloch appears on behalf of Cleartrade Limited. Eco-Synergies Ltd is no longer in existence, its name having been removed from the register due to its dissolution. Mr Mullen informs the Court that the Treasury Solicitor has confirmed that he has no objection to the restoration of the company to the register. Also that a lawyer acting for the shareholders of Eco-Synergies Nominees Ltd has confirmed that the company will not be opposing the petition. Further, that HMRC support the petition in respect of Beta Commodities Limited and the petition in respect of World Commodity Trading Limited and have given notice of an intention to appear. The joint liquidator of CT Carbon Limited has indicated that the petition will not be opposed. The liquidator of World Commodity Trading Limited has confirmed that he will not oppose the petition. The remainder of the companies have not made contact and it seems to me that it is right to consider winding up all of the companies not here or represented.

The starting point is to ask whether there is evidence which establishes that the companies sold carbon credits as investments. I turn to Mr Gray’s evidence. He shows that the sale of the carbon credits by the 12 companies to which I refer are not suitable for investment. I am satisfied on the basis of the evidence before me that the sale of VER carbon credits to the public on the basis that the credits will increase significantly in value would be a sale based on a fraudulent misrepresentation.

It is plain that the companies were trading VER carbon credits as investments which is wholly incorrect and misleading. Sales were made at excessive profit margins making investment unlikely to lead to a profit or to break even.

Eco-Synergies Ltd sat in the middle of the web of companies and obtained and supplied credits to the associated companies who were sat on the outer parts of the web and these associates relied upon Eco to supply them with training, websites and marketing material. It is plain that Eco is equally responsible for the mis-selling and plainly complicit in the activities complained of and I have no doubt the company should be restored to the register and wound up.

It is in the public interest to wind up a company that has obtained pecuniary advantage from members of the public by misrepresentation and the conduct is fraudulent. The petitioner makes reference to other matters such as the various failings to file accounts and annual returns that I do not need to refer in my judgment as the other allegations are so serious.

In my judgment these allegations are proved and I order that Eco-Synergies Ltd be restored to the register and wound up compulsorily together with the remaining companies. I have to recognize that the evidence of Mr R identifies grounds of objection to the winding up of that company [the 14th company]. Miss Tanchel has expanded on those grounds. Taking into account that it is not unusual for the Court at first instance to grant time for service of further evidence this does not mean it should be normal practice. It would be refused in these circumstances if it was where the company was to continue trading and seeking more time to make more profit. Mr P as sole director gives an undertaking not to trade and to file accounts for the company. It is therefore appropriate in the circumstances to grant a short adjournment for this to be done with strict timescales and I agree to the matter being brought back to me on 4 June 2014”.

A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2) and can be traded for money. The Financial Conduct Authority’s consumer information on carbon credit trading and what to consider before investing can be found at:

The concerns of the FCA regarding the lack of a secondary market are also reflected in guidance issued by HM Revenue and Customs in relation to carbon credits:http://www.hmrc.gov.uk/briefs/vat/brief2810.htm

In November 2013 the Insolvency Service highlighted action taken by the Secretary of State against 19 companies involved in the marketing of carbon credits to the public for investment: http://insolvency.presscentre.com/Press-Releases/Carbon-credit-scams-targeted-as-19-companies-shut-down-69586.aspx

Company Investigations, part of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (“BIS”).

Scams Awareness Month, supported by BIS, is running throughout May. Find out more here:

http://www.citizensadvice.org.uk/sam14

http://www.actionfraud.police.uk/scams-awareness-month-may14

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

By virtue of the winding up orders all public enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit , 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110 Email: piu.or@insolvency.gsi.gov.uk

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